Excerpt: - .....relief act relating to the contract between seller and buyer. on the other hand, clause (f), para. 1, para. (2), para. (4)(b), para. (5)(c), (d) and para. (6)(a) define the relation of the parties after the sale. the purchasers' rights stated in para. (3) and para. (6)(b) depend on payment having been made by him and not on the contract alone.8. before that passage they say that except on the ground of fraud, which term includes any such omission as is mentioned in the last paragraph of the section, or under the covenant for title or some express contract for compensation, the purchase money cannot be recovered or damages claimed. it is urged that this matter not falling within the ground of fraud or of any express contract for compensation, the money that was claimed by the.....

Judgment:

B.B. Ghose, J.

1. This is an appeal by defendant 11 against the judgment and decree of the Subordinate Judge First Court, Howrah, by which the learned Judge decreed the suit brought by the plaintiff. The facts are these : the appellant along with the other defendants 1 to 13 and the father of defendants 14 and 15 were the owners of two items of properties with which we are concerned. One was 2 bighas 5 cottahs in area and the other was only 5 cottahs in area. The mortgage was dated 14th May 1910 and the principal amount of the loan was Rs. 7,000. A preliminary decree was obtained by the mortgagee named Khirod Chandra Ghose on 20th July 1917 on his mortgage, by which decree the amount due to the mortgagee was found to be Rs. 16,000 odd. An appeal was taken by the mortgagor against the decree which was dismissed by this Court on 30th April 1920. By an indenture dated 3rd March 1921 the plaintiff purchased from all the mortgagors the bigger plot the area of which was 2 bighas 5 cottahs. In that indenture it was stated that the property was subject to an incumbrance of Ra, 16,300 by a deed of charge of mortgage in favour of Khirod Chandra and the property was sold subject to that incumbrance. The mortgagors received Rs. 11,751 as the consideration of the sale of their interest. There was a stipulation that the sellers would keep the purchaser harmless and indemnify him against any charge save and except the charge in favour of Khirod. There was the usual covenant for title and assurance, that apart from the incumbrance of Khirod, subject to which the property was sold, there was no other charge or incumbrance on the property. After the sale aforesaid, the decree in favour of the mortgagee was amended by this Court by an order dated 22nd August 19541 by which it was decreed that the mortgagee would be entitled to a sum of Rs. 18,000 odd with interest thereon at the rate of 6 per cent per annum from 20th January 1918, the date of redemption fixed under the decree. The result was that at the date of the sale the dues of the mortgagee amounted to something like Rs. 21,000. The mortgagee was paid by the purchaser who is the plaintiff in the case out of which this appeal has arisen, a sum of Rs. 23,000 odd on 3rd July 1922 in order to satisfy the mortgage decree and he got a deed of release from the mortgagee. The present suit was brought on 22nd December 1925 by which the plaintiff asked for the recovery from the defendants the difference between the sum he paid to the mortgagee in order to satisfy the mortgage decree and the sum of Rs. 16,000 odd that was mentioned in the indenture of sale of 3rd March 1921 as the amount of the incumbrance on the property.

2. The learned Subordinate Judge made a partial decree in favour of the plaintiff. He held that there was an express covenant in the indenture by which the plaintiff purchased the property to indemnify the plaintiff with regard to any sum that would be paid in satisfaction of the mortgage over and above the sum of Rs. 16,090 odd that was mentioned in the document as the amount of the charge. But he held that the plaintiff was entitled only to the money which would have been payable to the mortgagee on the date of the purchase minus Rs. 16,000 odd. He held that the plaintiff having delayed in paying off the mortgagee and thereby the amount having swelled by the running of interest, he cannot get the excess amount from the vendors. He therefore made a decree for Rs. 6,958 odd with costs as against defendants 1 to 11 and 14 and 15. The suit was dismissed against defendants 12 and 13 who, the learned Subordinate Judge found, had no interest in the property. Defendant 11 as aforesaid appeals primarily because defendant 11 is a solvent person against whom the decree is likely to be executed and the other defendants have been made respondents in the appeal.

3. Two points have been raised on behalf of the appellant by his advocate. The first is, that the learned Subordinate Judge is in error in holding that there was an express covenant indemnifying the purchaser against any payment in excess of Rs. 16,300 with regard to the incumbrance in favour of Khirod Chandra, subject to which he purchased the property, as stated in the indenture. There being no such express covenant, the Subordinate Judge ought not to have made a decree in favour of the plaintiff. The second point urged was that the learned Subordinate Judge is wrong in holding that the suit is not barred by limitation. The Subordinate Judge held that Article 116 read with Article 83, Lim. Act, is applicable to this case, and as the payment was made on 23rd July 1922 the present suit has been brought within the period of limitation. It is contended that as there was no contract to indemnify, Article 83 has no application. Besides as there is no contract in writing and registered, on which the plaintiff can base his case, Article 116 has no application.

4. The learned advocate for the appellant concedes that the defendants were bound to pay a rateable amount of the mortgage money which was a charge on the 5 cottah plot, because the mortgage on that piece o land has been paid off by the plaintiff. But he says that the present suit is not for recovering any such amount which could only be ascertained on evidence as to the respective value of the properties on 3rd July 1922, for a rateable distribution. Besides he contends that any claim for such contribution was barred by limitation at the date of suit.

5. The learned advocate for the plaintiff-respondent concedes that on a proper reading of the indenture dated 3rd March 1921, it would appear that there is no express covenant to indemnify with reference to any payment which the plaintiff was compelled to make in order to exonerate the property from the charge of Khirod. But he supports the decision of the learned Subordinate Judge on the ground that there is an implied covenant under which the plaintiff is entitled to claim compensation as against the vendors. He refers to Section 55; Sub-section (1), Clause (g), T.P. Act, in support of his contention. His argument shortly stated comes to this : that here the property was sold subject to the incumbrance of Khirod. According to the provision of that clause the seller was bound to pay interest due on the incumbrance on the property sold on the date of sale. But for the covenant in the indenture that the purchaser would have to pay Rs. 16,300 to the mortgagee, the seller under the provision of that clause would have been bound to pay the whole of the interest due up to that date and although the purchaser bought the property subject to the incumbrance, he would have to pay only the principal and the interest accrued subsequent to the date of sale. He, therefore, contends that although the reasoning of the learned Subordinate Judge cannot be supported, the decree made by him is quite correct. Under the express covenant in the indenture the plaintiff was only bound to pay Rs. 16,300 in discharge of the incumbrance; but under the implied covenant according to the provisions of the law the seller was bound to pay the balance of the mortgage amount.

6. With regard to the question of limitation, the learned advocate argued that Article 116 is applicable, because the claim arises under an implied covenant in the indenture of sale which is a registered instrument. In support of his contention he relied on the case of Krishnan Nambiar v. Kannan [1898] 21 Mad. 8.

7. The respondent raises an interesting point of law not quite free from difficulty. We have heard the careful arguments on both sides. The learned advocate for the appellant contends that the provisions contained in Section 55, Sub-section (1), Clause (g), T.P. Act, are not implied covenants for the breach of which a purchaser after the completion of the purchase can claim damages, or ask for rescission of the contract. His argument is that under Sub-section (1), Section 55 the seller is bound to do certain things in the absence of a contract to the contrary before the completion of the purchase. There are certain provisions which according to the section itself would render the seller liable on the ground of fraud. This is stated in the last paragraph of that section, as follows : An admission to make such disclosures as are mentioned in this section, para. (1), Clause (a) and para. (5), Clause (a) is fraudulent. There are certain provisions in para. (1) which relate to acts to be done by the seller after the conveyance is complete. But other provisions in para. (1) of the section relate to things which the seller is bound to do before the completion of the purchase; and he contends that after the purchase is effected and the transaction completed, the purchaser cannot hold the seller liable for noncompliance with any of those conditions unless there is any express covenant in the deed under which the seller is liable. He relies in support of his contention on certain observations made in the well-known commentaries of Shephard and Brown on the Transfer of Property Act, Edn. 7. At p. 192 the learned authors say:

The distinction between the antecedent contract and the conveyance between the duties of the parties before and after the sale is not clearly marked in the section. The rules contained in para. 1, with the exception of Clause (f) in Clause (a) para. 4 and in Clauses (a) and (b), para. 5, refer to matters antecedent to the sale and should, therefore, be taken with the provisions of the Specific Relief Act relating to the contract between seller and buyer. On the other hand, Clause (f), para. 1, para. (2), para. (4)(b), para. (5)(c), (d) and para. (6)(a) define the relation of the parties after the sale. The purchasers' rights stated in para. (3) and para. (6)(b) depend on payment having been made by him and not on the contract alone.

8. Before that passage they say that except on the ground of fraud, which term includes any such omission as is mentioned in the last paragraph of the section, or under the covenant for title or some express contract for compensation, the purchase money cannot be recovered or damages claimed. It is urged that this matter not falling within the ground of fraud or of any express contract for compensation, the money that was claimed by the plaintiff is not recoverable from the sellers. As an illustration, the learned advocate points out that if there is no express covenant for indemnity in case there is a misdescription in the area of the property sold, and the purchaser finds that the area is less than what was stated in the sale deed he is not entitled to any damages for the defect in area. In support of this contention the case of Abdullah Khan v. Abdur Rahman Beg [1896] 18 All. 322 may be cited. The question therefore is this : Is there an implied covenant in the deed of sale for the breach of which the purchaser is entitled to damages, or is it one of the obligations which the seller was bound to discharge before the completion of the sale? If there was no express covenant with regard to it, whether after the sale the obligations should not be in accordance with the rights of the parties to the property? It is contended by reference to the case of Waring v. Ward 7 Ves. 322 (at p. 337) which has been referred to in the judgment of the Privy Council in the case of Izzatunnissa Begum v. Kunwar Pertab Singh [1909] 31 All. 583 (at p. 209 of 36 I.A.) that after the purchase of the equity of redemption the purchaser is bound to discharge the incumbrances. However that may be, it seems to me that in this case the purchaser took the property subject to the liability on the mortgage of Khirod. The amount that was stated in the Indenture as due to the mortgagee was the actual amount found due under the mortgage decree then made by the Court, and by the indenture of sale the purchaser undertook to discharge the entire amount of the liability to Khirod as was found according to the decision of the Court. But the decree was amended by an order subsequent to the purchase of the plaintiff. If by the amendment the amount had been reduced the plaintiff would have profited by it. As the amount was increased the plaintiff was bound to pay the entire amount.

9. On a proper constuction of the instrument it seems to me that the plaintiff was bound to discharge the incumbrance of Khirod entirely and not merely to pay the sum mentioned in it. In the absence of any express covenant to the effect that the seller would be bound to pay any excess due on the mortgage the plaintiff is not entitled to the amount claimed by him. After carefully considering the arguments of both sides it seems to me that the contention on behalf of the appellant that the provision under Section 55, para. (1)(g) is one which cannot be enforced against the vendor without an express covenant after the completion of purchase is sound. There is no question of fraud in this case as the vendor stated the exact amount then decreed to the mortgagee.

10. With regard to the question of limitation also I agree with the contention on behalf of the appellant. It is true it has been held as contended by the learned advocate for the respondent that where there is an implied covenant arising out of a deed which is in writing and registered, the period of limitation would be governed by Article 116, Lim. Act. But this is not a covenant which can be implied from the sale deed and Article 116, Lim. Act, would not apply. The authority for this proposition is to be found in the case of Avutha v. Dayamma [1901] 24 Mad. 233 at p. 237 where the case of Krishna Nambiar v. Kantian [1898] 21 Mad. 8 cited on behalf of respondent is considered and distinguished. It was pointed out that under Section 55, para. (2), there is an implied covenant of title by the seller and therefore any suit for the breach of that covenant would be governed by Article 116, Lim. Act, but not such a case as this.

11. The result, therefore, is that the judgment and decree of the learned Subordinate Judge must be set aside with costs against the plaintiff-respondent in this Court as well as in the lower Court. As this is not a suit for contribution for a rateable amount charged on the 5-cottah plot we need not say anything with regard to the right of the purchaser to claim any portion of the money which he paid for redeeming both the properties. That matter is left open. The defendants-respondents will bear their own costs.